US manufacturer argues that Seoul could reduce costs with less-ambitious specification
Boeing aims to convince South Korea to revise its requirement for airborne early warning and control (AEW&C) aircraft to accept a solution more similar to the 737-700 being acquired by Australia.
Industry sources say South Korea's request for unique equipment, including communications systems, is driving up the cost of its potential 737-based AEW&C acquisition to beyond the budget for the programme. Boeing is offering an alternative bid that meets the budget but does not include some of the unique equipment requested by the South Korean air force.
Slower-than-expected negotiations with Boeing and rival Israel Aircraft Industries (IAI) has already forced South Korea to delay a selection from late 2004 to early 2005 (Flight International, 14-20 December 2004). Sources say negotiations with both sides are close to completion, but South Korea must decide whether to compromise some of its initial requirements or increase its 1.9 trillion won ($1.8 billion) budget for the E-X programme. The current budget includes roughly 1.55 trillion won for four aircraft, plus 3.55 billion won for other equipment. The first aircraft would be delivered in 2008.
IAI is offering a Gulfstream G550 business jet with Elta Systems' Phalcon radar and an L-3 communications suite. Sources say this solution meets the budget, but was outscored in the evaluation phase by the 737-based solution with Northrop Grumman's Mesa radar.
L-3 has also to secure export licences. The G550-based solution has over 50% US content, but IAI is leading the sales campaign with no financial or marketing contribution from Gulfstream or L-3.
BRENDAN SOBIE / SINGAPORE
Source: Flight International
